In a note addressed to clients, Ken Worthington, analyst at JPMorgan, said May was quite a destructive month for crypto investors and the whole industry. The ecosystem requires a “fresh catalyst” to accelerate things.
In the month of May, Terra collapsed miserably. The effect of the crash could be seen in the wider market as other crypto assets, including the flagship currencies, Bitcoin and Ethereum, experienced a steep dip in its prices.
At the time of writing, BTC was trading at $29,619.28, down 5.71% in the last 24 hours. While the second leading crypto asset by market cap globally, Ethereum was trading at $1,764.28.
Worthington noted that the challenging environment created in April continued until May as the UST algorithmic stablecoin collapsed, leading to “forced selling” and uncertainty. This impacted the wider crypto ecosystem negatively.
Compared to a difficult April, the trading volume in May seemed to be higher, however all the growth parameters suffered a dip in this last month, the analyst added.
As of now, the volume did recover, rising 17% from depressed April levels, though the volume is still 35% lower than the more robust 4Q21 level. The analyst further explained that it is still below more tepid volume levels in 1Q22.
Furthermore, despite witnessing such volatile nature of the crypto-industry, Worthington continues to be a great admirer of the crypto- technology, stating that “the crypto ecosystem requires a fresh catalyst.”The analyst predicts that the Ethereum Merge could potentially be the positive catalyst that the ecosystem needs.
For the uninitiated, The Merge is a highly awaited upgrade of Ethereum. The Merge means that Ethereum will merge to the beacon chain proof-of-stake system. The ecosystem is basically transitioning to proof-of-stake from the proof-of-work consensus mechanism.
As the highly-anticipated The Merge approaches Ethereum’s hashrate records lifetime highest. As per the data recorded on Sunday, the hashrate of Ethereum reached 132 PH/s. The 78 mining pools dedicating hash power to the Ethereum chain will need to mine another network, once the transition is completed.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/06/07/jpmorgan-analyst-says-ethereums-merge-can-act-as-a-fresh-catalyst-to-the-crypto-industry/